White House takes aim at GOP calls to extend all tax cuts

The White House strongly
disputed GOP arguments for renewing high-end tax cuts on Tuesday, arguing that
extending them would do little to aid the economy.

Christina Romer, a top
economic adviser to President Obama who serves as the chairwoman of the Council
of Economic Advisers, made the administration’s case for letting tax cuts set
to expire at the end of the year run out for high earners, while extending them
for middle-class families.

“Recently, some have argued
that extending the high-income cuts is necessary for the economy,” Romer wrote
in an official blog
post. “This is simply wrong.”

Extending tax cuts for high
earners would do little to strengthen the economy and add jobs, Romer said,
while maintaining the cuts for lower earners would provide an immediate
stimulus.

“If lawmakers are truly
concerned about job creation, as they should be given the painfully high rate
of unemployment, many approaches would be more cost effective than extending
the Bush tax cuts for high-income earners,” she said.

The blog post is a shot
across the bow at Republicans as a legislative fight escalates over the fate of
tax cuts sought by President George W. Bush’s administration. Those cuts are
set to expire at the end of this year, and spring upwards to their pre-2001
levels, unless lawmakers extend them.

Republicans have pressed the
administration and Democrats in Congress to extend all the cuts, arguing that
many small-business owners who pay income taxes on their company’s earnings
would be hurt. Obama has said he’d like to see the tax cuts repealed for
families earning more than $250,000 a year and individuals making more than
$200,000 a year, while extending the rest.

The administration also warned that extending the high-end tax
cuts would lead to pressure to make them permanent. This, Romer said, would
open a serious gap in the budget deficit for years to come.